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How medical debt and other collection items are tallied in a credit score is changing, potentially increasing the credit scores of millions of people.

Called the FICO 9, the new credit score changes how medical collections are treated from non-medical changes, such as credit cards. A medical debt will now damage a credit score less than paying a credit card bill on time, for example.

FICO 9 came out in 2014, but the improved credit scores could just now be coming to fruition for many consumers because it can take a few years for banks and other lenders to implement the new system.

The new FICO 9 score should give responsible borrowers better access to credit and lower rates on existing credit once the changes are accepted by the industry.

Part of the thinking behind the changes is that for many people facing medical debt collections, it isn’t something they have a lot of control over. People get sick or are in an accident and can’t control how high their medical bills are, and may not even know that their medical debt is in collections.

More than 64 million Americans have some kind of medical collection record on their credit reports, according to Experian, a credit bureau. Almost all medical debts are reported to credit bureaus by collection agencies.

The FICO score is the most widely used credit score in the country, and is used by companies selling mortgages, credit cards, personal loans and more.

Another change with FICO 9 is that older collection items will have less impact on a credit score. Other types of debt that are sold to a collection agency—such as an unpaid utility bill or phone bill, school loan or rent—can still be reported to a credit bureau, but older collections will have less impact on a credit score. If the collection item is paid back, the score will improve.

I hope you found this real estate information helpful. Please contact me for all your real estate needs today!

No matter how large your Central Coast home may be, there’s always one room that’s just a little too small. Luckily, with some quick design tricks, any room can appear larger. Try a couple of these suggestions and watch your room magically expand.

Use lighter paint colors.

Paint or wallpaper the ceiling in order to make a room look taller.

Install wall-to-wall or floor-to-ceiling bookcases to make the ceilings look higher.

Pull furniture away from the walls to create a feeling of spaciousness.

Hang mirrors opposite windows to reflect light and make the room seem bigger.

Keep knickknacks, framed photos, books, etc., to a minimum to create a sense of spaciousness.

Use furniture that doubles for something else. For example, a lidded ottoman that’s also a seat that’s also a storage unit.

Keep window treatments to a minimum to expose as much of the window—and therefore, light—as possible. Think sheer, white curtains. Or better yet, nothing at all.

Stay away from bold prints and colors. Stick to smaller patterns and neutrals when it comes to rugs and upholstery.

Deploy stripes, either on your walls or floors, which will make the walls look taller and the floors longer.

For more tips to make small spaces appear larger than they are, contact me today.

It’s a smart rule to follow, and not just to make a sale. The National Association of Realtors Code of Ethics goes into some detail about what agents should disclose to clients, though there isn’t much about rules for real estate disclosures about a property’s condition.

An agent’s role in conveying the seller’s disclosure is pretty straightforward: Tell everything required by law, which vary by state and can go down to the city and county level.

The one area that federal law requires disclosure of is lead paint. If a home was built before 1978, it may contain lead paint and must be checked for it, and a disclosure form must be completed.

The state and federal regulations are meant to disclose known facts about a property’s condition, including problems that could discourage potential buyers. These include leaking windows, being in a flood zone and if a murder happened on the site.

While a home inspection should turn up most issues and could turn up new issues that no one knew about, it’s legally up to the seller to tell buyers about problems they already know about a home.

Most states require real estate agents and brokers to sign a disclosure form listing everything material about the deal, under penalty of perjury.

A real estate agent representing the buyer has a duty to disclose information that would allow the buyer to complete the sale at the lowest price and at the most favorable terms for the buyer, and these can include home defects that need to be fixed.

Some issues may not meet current building codes but are working fine for the current owner, who isn’t obligated to disclose them, Wolfs says. These can include older windows, railings that are low, a driveway needing repair and improper grading.

Sellers and their agents may not have to disclose such issues, but revealing as much as they can in a disclosure statement is only in their best interest in the long run if they don’t want to be sued afterward for not alerting a buyer to something they knew about.

“Disclose, disclose, disclose.” Follow that mantra and you should be safe.

I hope you found this real estate information helpful. Please contact me for all your real estate needs today!

If you’ve got a problem with credit card debt, there might be a simple solution that’s already sitting in your wallet or purse — a $20 bill.

Having cash in your pocket may seem counterintuitive. If you’ve heard the phrase “burning a hole in my pocket,” then you know how enticing it can be to spend money you’re carrying around.

But having cash on hand can cause you to spend less money than you would with a credit card — at least for small purchases — researchers have found.

A study by the Urban Institute found that using cash when a purchase is under $20 left the consumer with $104 less in revolving debt, on average. That dropped their credit card balances 2 percent below their baseline average.

For young people, the $20 cash rule led to more savings. People under 40 who were reminded “don’t swipe the small stuff” and to use cash on purchases for less than $20 had $173 less in revolving debt.

Credit keeps charging
The group also sent reminders to credit union members that “credit keeps charging” and that using a credit card adds about 20 percent to the total cost of something.

People who received that reminder didn’t significantly change the amount of their credit card debt, the survey found, but younger people did charge less. People under 40 who received the reminder about the cost going up by 20 percent with a credit card had $160 less in credit card debt.

A swipe is easy
Swiping a credit card can seem a lot easier and cheaper than using cash because you’re not parting with anything tangible. Seeing a $20 bill leave your wallet feels more like spending money than using a plastic card to buy something. After all, a $6 drink doesn’t look too bad when compared to a $5,000 spending limit on your credit card.

Having cash on hand helps you refrain from making small impulse purchases, which quickly add up. Check your credit card statement – seeing is believing.

I hope you found this information helpful. Please contact me for all your real estate needs today!

No one wants to be reminded by their bank that using a credit card too much is a bad idea. It’s a rule of thumb that everyone knows, but often avoids because a credit card is a major convenience. After all, who wants to always carry cash for everyday purchases?

However, it turns out that “revolvers” — people who carry a balance on their credit card each month with revolving credit — can save some money by being reminded every once in a while by their bank about the downsides of using credit cards.

Researchers at the Urban Institute found that email reminders from your bank or a banner ad on its website can become big enough annoyances to get credit card users to cut spending by 2 percent.

One message reminded credit card holders to use cash for a purchase of less than $20. A second message highlighted the fact that credit cards add 20 percent to the cost of something with revolving credit.

The first message led to an average savings of $104, and up to $173 for revolvers under age 40. The second message had less of an impact, saving people under 40 an average of $160.

There are other small ways consumers can remind themselves to use their credit card less. Budgeting apps or reminders set up on your phone can help you automate savings, for example, by automatically moving money into a savings or retirement account.

Your bank‘s app or website may also allow you to set text or email alerts when your account balance is low. Your credit card may be able to do the same thing, sending you an email when you’ve spent over a certain amount on a purchase, or letting you know when you’re near your credit limit.

The America Saves program sends periodic text messages to participants with savings tips and words of encouragement. Apps such as Hiatus and Trim help consumers stop automatic renewals on their credit cards that they may have forgotten about.

If you carry a revolving balance on your credit card, you’re not alone.

Data from TransUnion, a consumer credit reporting agency, shows that about 133 million people have at least one credit card with a balance. The average credit card debt rose to $5,247 in the second quarter of this year, up from $5,197 in the first quarter.

To start lowering your credit card debt, make more than the minimum payment each month. Until you start using only cash for purchases of $20 or less, that’s one of the best ways to tackle credit card debt.

I hope you found this information helpful. Please contact me at (805) 610-8552 for all your real estate needs today!

With a refinancing, you pay off an old loan on your home and take out a new one, usually at a lower mortgage interest rate. To refinance, you will generally need to have equity in your home, a good credit rating, and steady income. You can borrow a percentage of the equity to cover remodeling costs, debt consolidate, and college tuition.

When you refinance, you will incur all the closing costs that go along with getting a new mortgage. So unless you’re doing extensive renovations and can get a mortgage interest rate at least two points below your current loan rate, you may want to select another financing option.

A U.S. Dept of Energy (energy.gov) report can help homeowners lower water heating costs while wasting less hot water.

According to the report, water heating is the second-largest energy expense in a typical home, accounting for about 18 percent of annual utility expenses after heating and cooling. To conserve hot water, homeowners can fix leaks, install low-flow fixtures, and purchase energy-efficient water dependent appliances like dishwashers and clothes washers.

Since faucets and appliances can use a lot of hot water, homeowners are encouraged to look for ways to heat your water more efficiently and use less. One way to significantly reduce hot water use is by simply repairing leaks in fixtures - faucets and shower heads - or pipes.

A leak of one drip per second wastes 1,661 gallons of water and can cost up to $35 per year. And if your water heater's tank leaks, you need a new water heater.

Installing low-flow fixtures can also make a huge difference. The DOE report says homeowners can purchase some quality, low-flow fixtures for around $10 to $20 a piece and achieve water savings of 25 to 60 percent.For maximum water efficiency, the report advises to select a shower head with a flow rate of less than 2.5 gpm (gallons per minute). There are two basic types of low-flow shower heads: aerating and laminar-flow.Aerating shower heads mix air with water, forming a misty spray. Laminar-flow shower heads form individual streams of water.

When it comes to faucets, the aerator - the screw-on tip of the faucet - ultimately determines the maximum flow rate of a faucet. Aerators are inexpensive to replace and they can be one of the most cost-effective water conservation measures the DOE report relates.

For maximum water efficiency, purchase aerators that have flow rates of no more than 1.0 gpm. Some aerators even come with shut-off valves that allow you to stop the flow of water without affecting the temperature. When replacing an aerator, bring the one you're replacing to the store with you to ensure a proper fit.

You may have heard about “accident forgiveness” insurance from some of the TV commercials lately. This is an insurance add-on that the major insurance companies offer to their best customers that’s usually only used once. One accident is covered and forgiven, meaning your insurance rates won’t rise that one time.

This extra insurance can cost a little more, but can be cheaper than the increased premium would be after an accident. It can be a smart buy for parents with teen drivers. Some insurers may offer the extra coverage for free.

Adult drivers with good driving records, however, may not want to buy it because they’d essentially be paying for something they’re unlikely to use because they’re good drivers.

Being at-fault in an auto accident can cause insurance rates to rise 30 percent or more.

Some insurers provide accident forgiveness immediately to customers who buy it, while others may require up to five years of not having an accident under the policy before they’ll forgive one.

How often an insurer forgives also varies. Most forgive just the first at-fault accident, though some will start the forgiveness clock again in three to six years. Some may also require a driver not to have any moving violations for three years.

Safe drivers with clean driving records may not benefit by buying accident forgiveness because they should already have low rates, or at least have standard policies.

But it could still be worthwhile if you want to cover the chance that you may cause an accident someday, despite never causing one so far in your driving life.

Having teenage drivers may already result in higher insurance rates from the increased risk. Buying accident forgiveness insurance could help ease the pain of rates going up after a child’s first accident, no matter how small.

To help determine if the cost is worthwhile, ask your insurer how much your rates would rise if you caused an accident. This information should be available in a surcharge schedule that outlines percentage increases from specific infractions. If the potential rate hike is less than the cost of the added insurance, then it probably isn’t worth getting.

I hope you found this information helpful. Please contact me for all your real estate information needs today!

The automatic email response – aka, the autoresponder - has become a ubiquitous part of our tech-driven society. When we’re away or tied up in meetings, having the ability to instantly let people know we’re not available allows us to feel that we’re being attentive and responsible. However, not all autoresponders are created equal. If yours doesn’t have the following components, it may be doing more harm than good:

A pleasant greeting. Your autoresponder should be pleasant and reflect your personality. Thank people for writing and assure them they will be taken care of in your absence.

An indication of why you’re unavailable. If you’re on vacation, let people know – they’ll be more likely to respect your away time. If you’re at an important conference or industry event, consider mentioning that as well. Business associates may be at the same event and can seek you out while there.

A clear explanation of your availability. There’s a big difference between checking email a few times a day and not checking email at all – so let people know exactly if and when they can expect to hear from you.

An alternative. Give clear direction as to who people can contact in your absence. Be sure to provide a colleague’s email and phone number – don’t forget the extension.

A solution for urgent matters. Consider leaving your mobile number for those who need to reach you in an emergency.

A date when you’ll be back in action. Let people know the date or time when you’ll be back and able to manage your email again.

When executed properly, autoresponders can be a great way to reflect your professionalism and commitment to those you deal with. Spend a little time and put some polish on your next one—and don’t forget to turn it off as soon as you’ve returned.

Deciding where to live in SLO County, if you’re going to have children, and who takes out the garbage are some of the big and small decisions newlyweds have to make together after the wedding gifts are put away and they’re ready to start their lives together.

There are also financial decisions to make as a married couple, though they may not be as easy to discuss as who’s making dinner on Sunday nights.

Here are some financial priorities newlyweds should set — together:

Set a budget: A good way to start is by living within your means and setting a family budget. Start by making a list of your monthly income and expenses, and decide which are must-haves (rent and groceries) and which can be eliminated or at least cut back (cable TV and dining out).

The goal is for your budget to leave you with enough extra money each month to save for other goals, and to not spend more than you have. If you have debt, including credit card debt, come up with a plan to pay it off.

Financial goals: Discuss your individual and joint goals, and start saving for them. These can include having children, saving for a down payment on a house, buying a new car, and funding retirement accounts for each of you.

Insurance: There are a few insurance needs to consider when you get married. A family health insurance plan may save you money, as will having all family cars on one auto insurance policy. You may also need extra homeowners or renters insurance to cover all the possessions you now have together, including jewelry and all of those expensive wedding gifts you just received.

Life insurance is important when you’re married, especially if one spouse doesn’t work and relies on the other person for an income, or if you’re going to have children soon.

Tax withholdings: Getting married can lower your taxes. If one spouse isn’t working, then the other can add them as an allowance on their taxes, allowing them to change their withholding from their paycheck and bring more money home. An IRS worksheet can help make this calculation.

Bank accounts: Joint checking, savings and emergency accounts, along with keeping individual checking accounts for pocket money, are bank accounts worth discussing as a couple. Splitting electric bills in half, as you may have done in college, is over.

Once you get started on these accounts, give yourself six months or so to get used to them before deciding to make changes. A budget and joint bank accounts, like a new marriage, can take a little work.

Aaron Crowe is a freelance journalist who specializes in personal finance topics.

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